Greece is teetering towards a default on its international loans, prompting Greek officials to seek the advice of European and International Monetary Fund officials to measures the financially challenged nation could do to speed up the release of its $11 billion anticipated aid.

The reply of European economic officials on Monday was that Athens must make deeper and faster budget cuts and economic reforms.

In the event of a Greek default, the ones to be hit hardest would be German banks Hypo Real Estate Holding and WestLB which jointly hold more than 50 percent of Greek debts held by Deutsche banks. Hypo has $12 billion (EUR 8.76 billion) and WestLB has $1.66 billion (EUR 1.21 billion).

In contrast Deutsche Bank and Commerzbank, the two largest lenders in Germany, hold only a total of $4.6 billion (EUR 3.35 billion) Greek debt.

A default would be the second burden for German taxpayers, who backed up Hypo and WestLB during the 2008 global financial crisis to prevent their collapse. Hypo and WestLB are now both state-owned banks.

Despite European leader's attempt to convince the global markets that Greece and other eurozone nations hit by the debt contagion would not default, the markets are skeptical and hiked borrowing costs for governments and banks in the 17-nation one-currency zone.

To hold down interest rates pay by Italy, which was downgraded by Standard & Poor's on Monday, and Spain, the European Central Bank purchased over $200 billion in government bonds.

The IMF mission head who visited Greece urged Athens on Monday to speed up its reforms. Although the bailout package previously released by the ECB and IMF to Greece was premised on reduction of state payroll and disposal of inefficient government-owned assets, the embattled Greek government has not delivered on its promise.

Fears of Greece having difficulty qualifying for another round of bailout caused major stock indices in Europe such as Germany's DAX, France's CAC and Euro Stoxx to close down by 3 percent on Monday.

The Dow Jones industrial average and S&P's 500-stock index lost almost 1 percent on the same day.

With the growing fears of a default, Greek 10-year bonds are trading about 80 percent below face value.